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FOR CITY COUNCIL STAFF REPORT
DATE: May 2, 2018 CONSENT CALENDAR
SUBJECT: PALM SPRINGS INNOVATION HUB AND ACCELERATOR CAMPUS
QUARTERLY REPORT FOR JANUARY 1, 2018 TO MARCH 31, 2018
FROM: David H. Ready, City Manager
BY: Community and Economic Development
SUMMARY
The Consulting Services Agreement approved July 6, 2016, with the Coachella Valley
Economic Partnership ("CVEP") requires CVEP to prepare and submit quarterly Palm
Springs Innovation Hub ("PSiHub") reports. The PSiHub is an incubator that provides
programs, services, and incentives to start-up businesses focused on clean technology
and renewable energy. It is one of 16 innovation hubs in California and offers qualified
companies office space, a conference area, consulting, and administrative support to
encourage their growth and success.
RECOMMENDATION:
Receive and file the first quarterly report from the Coachella Valley Economic
Partnership for the Palm Springs Innovation Hub for the period of January 1, 2018, to
March 31, 2018.
STAFF ANALYSIS:
On May 11, 2010, the City of Palm Springs was designated as an Innovation Hub under
the State of California Innovation Hub Program (AB 250). The purpose of iHubs is to
stimulate partnerships, economic development, and job creation by leveraging assets to
provide an innovation platform for startup businesses, economic development
organizations, business groups, and financial institutions.
As required by AB250, for iHubs designated by the Governor's Office of Business and
Economic Development (GO-Biz) before January 1, 2014, the City entered into a
Memorandum of Understanding (MOU) with the GO-Biz on May 21, 2015, which among
other things, requires the City, as the Designated iHub, to:
I'i1EM NO. 1 44
City Council Staff Report
May 2, 2018--Page 2
Coachella Valley Economic Partnership Report
1. Coordinate and participate in five (5) keynote speaker series seminars annually
with national and regional partners focused on supporting start-up and emerging
technology entrepreneurs that provide advice on starting a business including
financing, marketing and planning. Such participation will be in the form of
attendance, financial or in-kind sponsorship, participation as a panelist or
moderator during the event;
2. Coordinate and support through direct or indirect funding an annual innovation
event in partnership with GO-Biz that demonstrates research and partnerships
that have evolved out of local universities or research laboratories through the
Innovation Hub;
3. Through partner networks provide workshops, seminars, and conferences that
assist 20 startup and emerging companies annually;
4. Provide up to five (5) letters of support and commitments to partner network that
support further grant applications for programs focused on iHub activities
annually; and,
5. Provide in person and or electronic introductions to local municipalities for start-
up and emerging technology companies to receive business assistance in the
form of streamlining permitting process, access to innovation hub partner
networks, and business assistance where appropriate.
To manage its efforts and responsibilities as the Designated iHub, the City entered a
Consulting Services Agreement with CVEP on July 6, 2016 (Agreement), for continued
management of the PSiHub and Palm Springs Accelerator Campus, (the "Program").
The Agreement facilitates the terms by which CVEP delivers management,
administrative and client services to meet the goals of the Program, including, but not
limited to, providing education, support, training, business assistance, and networking
programs. CVEP also manages the physical office space reserved for PSiHub clients
housed at the Rabobank Regional Business Center, located at 3111 E. Tahquitz
Canyon Way, and at the Accelerator Campus, located at 2901 E. Alejo Road.
In accordance with the Agreement, CVEP is required to submit quarterly and annual
progress reports to the City identifying how the Program is performing. CVEP has
submitted its first quarterly report for the 2018 calendar year covering January 1 to
March 31, 2018, which is included as ATTACHMENT 1 for reference.
Highlights for the first quarter include:
• Adding two new iHub clients for a total of thirty eight clients (seven in-house, 14
at the Accelerator Campus, and 17 virtual clients);
• Participating in four events, including serving as a speaker at the 2018 Greater
Coachella Valley Chamber of Commerce Board of Directors Retreat;
• Establishing a partnership with Palm Springs Life Magazine to produce a
business publication;
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City Council Staff Report
May 2, 2018--Page 3
Coachella Valley Economic Partnership Report
• Working with Palm Springs Life Magazine and Convention and Visitors Bureau to
produce an Ernst & Young local opportunities event;
• INDY Power Systems is preparing a private placement memorandum in advance
of a public stock offering;
• Eco Culture Manufacturing products have been accepted by Nordstrom's; and,
• EV Enterprises is negotiating a $2 million order for a solar / battery storage
project that will enable wind turbines to store energy during low demand hours to
be returned to the grid during high demand hours.
ENVIRONMENTAL IMPACT:
Section 15061 (b)(3) of the California Environmental Quality Act ("CEQA") Guidelines
exempts activities that are covered under the general rule that CEQA applies only to
projects that have the potential to cause significant effects on the environment. Where it
can be seen with certainty that there is no possibility the activity in question may have a
significant effect upon the environment, the activity is not subject to CEQA. The
requested action requests the City Council receive and file a quarterly report on the
activities of CVEP and the PSiHub, which itself will not result in any new direct physical
impacts to the environment. Therefore, the requested action is considered exempt from
CEQA.
FISCAL IMPACT:
The City compensates CVEP $196,500 annually, paid in quarterly payments upon
submission of the Quarter Report metrics required by the Agreement.
SUBMITTED:
Jay Vi ata, irector David H. Ready, Es .,
Comm ni & Economic Development City Manager
Attachments:
1. PS Hub &Accelerator Campus Quarterly Report October 1 to December 31,
2017
03
ATTACHMENT 1
Palm Springs Hub and Accelerator Campus
Quarterly Report
January 1 to March 31, 2018
04
PALM SPRINGS
IHUB AND ACCELERATOR CAMPUS
QUARTERLY REPORT
January 1 — March 31, 2018
Submitted by: Joe Wallace
Palm Springs !Hub Managing Director
April 2, 2018
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Executive Summary
The Palm Springs Innovation Hub (PSIHub) is a State designated business Incubator funded by the City of
Palm Springs and managed by the Coachella Valley Economic Partnership JCVEP), an economic
development organization serving the entire region. Currently the investors in the Mub are the City of
Palm Springs, the Desert Healthcare District, and Wells Fargo Hank.
In 2013 the City of Palm Springs and the Desert Healthcare District partnered to fund the refurbishment of
a 43,000 square foot complex of buildings now known as the Palm Springs Accelerator Campus. The
purpose for this campus is to encourage promising companies with proven concepts and markets to
establish their supply chains and manufacturing operations in Palm Springs to reduce the risk of flight to
places like Silicon Valley where exemplary incubation clients are often enticed by venture capital.
The Mub's primary focus is on early stage businesses in the renewable energy and associated technology
space. The Mub facilitates education, support, training, business assistance, and networking programs to
contributing members, and overseas operations of a small business incubator.
This report covers the first quarter of 2018. The quarter saw the client base in the !Hub exceed capacity
with 7 in-house, 14 in the Accelerator Campus, and 17 virtual clients for a total of 38 clients.
A number of metrics for evaluating PSiHub progress were checked that are consistent with the goals of
creating wealth and setting the transformation of the Coachella Valley economy into motion.
PS IHub Q12018 Report
Introduction
The Mub is a network that enhances Coachella Valley's competitiveness by stimulating partnerships and collaborations that
accelerate investment and economic development around research clusters. The Nub is focused on clean technology,with
emphasis on sustainable businesses,renewable energy,and enhancing technologies.
The goals of the iHub include:
• Transform the local economy through growing renewable energy based enterprises
• Continue to accept 10 companies per year in perpetuity after achieving the goal of 50 companies in the first 5 years
• Create local high paying technology and manufacturing jobs in the Coachella Valley
• Develop programs to enable and encourage the Coachella Valley and California compete in the global marketplace
• Increase the per capita household income and standard of living regionally
• Attract angel and venture capital investments in client companies
The Mub operates a small business incubator that has the capacity to mentor up to six clients in-house at the Rabobank Regional
Business Center,twelve at the Accelerator Campus,and twelve virtually. The Nub offers office space to clients,complete with
office equipment and amenities,access to shared conference rooms,a board room,and a dedicated staff that monitors and assists
the clients. CVlHub clients have access to professional services at free or reduced costs,targeted training classes,and workshops.
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Community Relations/Accolades
The iHub participated in the following events this quarter:
• Riverside County EDA Regional Planning Sessions
• Monthly California Innovation Hub Conference Calls(3)
• Spoke at 2018 Greater Coachella Valley Chamber of Commerce Board of Directors Retreat
• CSUSB-PD Advancement Board of Directors:Executive Committee
• CSUSB-PD:Invited Speaker on Blockchain and cryptocurrency opportunities
Palm Springs!Hub Clients on March 31,2018
The iHub started Ct1-2018 with thirty six incubator clients. During the first quarter a total of 5 applications or visits of interest to the
iHub were reviewed and two were accepted. The total at the end of the quarter was thirty eight.
Partnership Activity
The partnerships resulted in tangible activity during this quarter:
• Palm Springs Life Magazine agreed to work with CVEP on a business publication
• Working with PSL and CVB to put together a Ernst&Young local opportunities event
• Working with PSL and CVB to establish a spring event to debut in 2019 that is a"thought"conference modelled after the
Idea Festival in Louisville,KY.
Metrics: The PSIHub updates their metrics and reports on them quarterly. The metrics include:
Metric Result
Number of resident companies 7
Number of Virtual Companies 17
Accelerator Campus Clients 14
Number of graduating companies 1(12 total to date),with 12
others receiving services.
Number of jobs created by PSiHub companies to date 175(6 this quarter)
Revenue/sales from PSiHub companies(estimated for quarter) Greater than$1 Million
Investment Dollars Raised by PSiHub Clients Greater than$1 Million
Number of sponsors,corporate partners,members or contracts for the Over 200 identified
iHub
Number of patent applications and issued patents(total) Patent and Trademark
count is now at 22,
Number of licenses or agreements by PSIHub companies 2 in discussion
Funding sources and amounts leveraged/invested WFB still under review
Number of companies receiving outreach services 12(excluding iHub clients)
Number of entities providing outreach services 4
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Client Highlights from QS-2018
• Companies domiciled at the Palm Springs Accelerator Campus are all running ahead of their sales for 2017 by percentages ranging from a
low of 35%to a high of over 100%. It is expected that IHub companies had about$7 Million in revenue in 2017 and will exceed$10
million in 2018
• SecoSys attracted two trauches of equity Investment from well know angel investors from the Bay Area at a valuation of 250%above
their original investment.
• 1NDY Power Systems converted from an LLC to a C Corp and is undertaking a PPM(private placement memorandum)In advance of a
public stock offering.
• EV Enterprises negotiating an order for over$2M solar/batter storage project that will enable the windmills to store energy at night to
return to the grid during the day.
• Eco Culture Manufacturing products accepted by Nordstrom's
• Double Lock systems cleared technical review hurdle for SBIR grant of$125,000 for proof of concept project for medical device that
eliminates one channel for introduction of contamination into surgical infusion tubes.
• Joe Wallace,CVEP CEO was named Lifestream Humanitarian of the Year for assistance with the 9 cities blood challenge
Previously Stated Goals for Q3-2018
• Continue dialog with Wells Fargo for IN2 funding(yes,going there in May)
• Continue to attempt to establish a volunteer attorney in residence for!Hub companies(fell through)
• Establish Marketing and Publishing partnership with Palm Springs Life Magazine(done verbally)
• CVEP staff to complete conversational Spanish language training(9 of 12 classes completed)
• Speak at three local civic organizations about what CVEP and the IHub do to add value to the economy(done)
• 2018 Audit approved and completed
• Start dialog with City of Palm Springs for iHub management contract for period beginning July 1,2018
Goals for Q2-2018
• Finalize agreement with City of Palm Springs for Wub management contract for period beginning July 1,2018
• Have successful meeting with Wells Fargo and NREL in Denver May 3-5
• Manage successful Fast Pitch Contest and prepare contestants for Riverside County Event.
• Finalize contract with Advanced American Supply and Maverick Ventures for activation of Foreign Trade Zone at Palm
Springs Accelerator Campus
• Begin recording weekly radio shows on IHub radio. Time to Prosper with Joe Wallace will air on Sundays from 12-1 starting
in late April
Measure J Progress Report
• All projects completed and all dollars expended and accounted for.
Appendices:
• iHub Companies circa March 31, 2018
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3111 E.Tahquitz Canyon Way
Palm Springs,CA 92262
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p:(760)548.0370
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Palm Springs IHub Roster(End of Q12019)
Energy(Renewables/Management/Conservation)
• Desert GeoExchange: Parent company Geothermal Resource Group provides drilling services. Desert
GeoExchange is evaluating its entrance into geothermal heating/cooling systems.
• EV Enterprises:Producer of lithium-ion battery components,microelectronics and other related products
for electric vehicle applications and more.
*Located at Palm Springs Accelerator Campus
• Heppolt:Heppolt has created a new wind turbine.The design allows for installation&maintenance to be
carried out at ground level as opposed to current vertical turbines. HWE is receiving support from Los
Alamos National Lab.
• Indy Power Systems:Offers a patented energy blending technology to enable customers to minimize their
load charges by storing energy during periods of low demand for use during peak demand times.
• Soctec Solar. A designer and manufacturer of all-in-one alternative energy solution systems.These units
can be deployed in regions or situations where power is not easily accessible.
'Located at Palm Springs Accelerator Campus
• SECDSYS:Their platform seamlessly integrates into existing water meters to manage,control& conserve
water in real-time for water districts,property managers and consumers.
`Located at Palm Springs Accelerator Campus
• Solaris Power Cells:Producer of super capacitor, solid-state cells that have the potential to store energy
with rapid charging rates.
'Located at Palm Springs Accelerator Campus
• SolAqua:China-based manufacturer of solar/solar thermal components looking to establish a U.S.-based
manufacturing hub.
• Swiss Hytech:Swiss-based business engaged in hybrid LeMans racing.Their technology uses a flywheel to
store energy as opposed to other storage systems such as battery systems.
• Vestaxx: German-based startup developing insulating glass units for applications in intelligent and
dynamic windows and glass building facades. Their propriety glass coating technology Increases thermal
insulation efficiency.
Healthcare/Medical Innovation
• ButterFLI Inc.: ButterFLI has created a local infrastructure for on-demand assisted transportation for
seniors and those with disabilities,such as those who are wheelchair-bound. ButterFLi is like UBER but for
non-emergency medical transportation for seniors and those with disabilities.
'Located at Palm Springs Accelerator Campus
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3111 E.Tahquitz Canyon Way
Palm Springs,CA 92262
p:(760)340-1575
p:(760)548-0370
w: :
• The Connected Grip:The Connected Grip executive team includes a former member of RIM's(Research In
Motion) Blackberry team. They are developing new products in the exercise machine category that
incorporate new technologies such as predictive modelling and customized Uls.
'Located at Health&Medical Innovation Center
• Double Lock Systems: Elizabeth Wong is a local CRNA who was recently granted a U.S. patent for a new
sterile IV port and syringe system.She is currently working on prototype variations of this system.
• GattaCo: Developing products that replace the need for centrifuges and allows for extraction of plasma
from whole blood in half the time of current means.
'Located at Health& Medical Innovation Center
• Incontinence Technologies:The Fanny Wrapper is an adult diaper system with an integrated sensor unit
used to aid caretakers of incontinent adults.
• Pacific Coast Innovations:Designer of a proprietary data compression algorithm that has many different
industry applications.Their first application will be in the manufacturing of medical devices.
• Pet Projx LLC: Pet Projx is introducing a new hand sanitizer/disinfectant that will focus on the social
acceptance, appeal and form factor that currently hinders this category. Pet Projx also has ancillary
products to introduce down the road that would expand into the beauty and cosmetics category.
• Priatas: A medical device company focused on intelligent design of medical and lab ware disposables
throughout the entire life cycle of the product. By using less material and modulating instruments, they
hope to decrease medical waste.
"Located at Health&Medical Innovation Center
• Purethone 360: Currently researching a new type of disinfectant that would use proprietary technology
for end-consumer sales.
• Restroam Aid. A proprietary system designed to give independence to handicapped individuals who
otherwise need assistance using the restroom.
• Shannon Stevens:Shannon Stevens is a local nurse who has developed a medical-product to be used in
operating room environments for the irrigation of limbs or other body parts subjected to trauma that
need to be cleaned and treated.
• TransMedimaging: Operates in the electronic health record industry. Their propriety service eliminates
waste in medical imaging by facilitation of cloud based data,and hi-res medical images storage.
• C41A (Care Always In All-Ways):A universal patient portal that gives patients the ability to control and
engage with their and their family's healthcare across the entire care continuum by connecting he portal
to all existing EHR(Electronic Medical Record)systems using block chain technology as a ledger.
Software—Primary(Education,Lifestyle,Marketing,Social Media)
• Pociab A new,creative social network designed to connect like-minded individuals based around polling
in an effort to foster and encourage debate,create a collective voice and quantify opinions.
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3111 E.Tahquitz Canyon Way
Palm Springs,CA 92262
p:(760)340-1575
p:(760)548-0370
w:
• PS Talent:Developer of virtual entertainment products on the Sony PlayStation platform
• SpartaApp:Propriety mobile application platform for connecting artists with art collectors worldwide.
• Spectrum Media:Spectrum is a cutting-edge,multi-media company leading the way in the production,
distribution and marketing of audio and video content,across platforms.
'Located at the Palm Springs Accelerator Campus
• Wise Education:Delivers online English as a second language education worldwide using a unique video
conferencing platform.
• Kamran Choudary:Developing a smart phone app to facilitate the presentation and use of retail coupons
using customer designations and recommendations to friends and family for delivery.
Hardware—Primary(Security,Service,Social Media)
• Heightened Security:HS is a local manufacturer of security solutions for residential and commercial
clients.Their product can seamlessly integrate into existing security systems.
• Paul Roide:Paul Roide is a local tradesman. He has developed and patented a new paint gun sprayer that
aims to dramatically increase the efficiency of currently available models.
*Located at the Palm Springs Accelerator Campus
• Post Modern:A developer of integrated hardware/software systems for consumer marketing.Their
system allows marketers to integrate social media into marketing events and tradeshows using Interactive
kiosks.
*Located at Palm Springs Accelerator Campus
• Seismic Warning Systems:Developing a regionally-based earthquake warning system with proprietary
detection and customized-alert technology.
Textile&Wearables
• Eco Culture Manufacturing:Textile manufacturing focused on recyclable materials and integration of
sensor technologies for smart devices.
• HipS-sister. Manufacturer of the fashionable,functional and flattering alternative to the fanny pack that
integrates a shield for electromagnetic fields caused by cell phones.
'Located of Palm Springs Accelerator Campus
• Platinum Sun:Designer of rash guards,leggings and neoprene jackets.Currently based in Miami with
Intentions of relocating operations to California.
• Advanced American Supply.Garment designer and manufacturer from Canada is moving into the Palm
Springs Accelerator Campus along with sister company Maverick to utilize foreign trade zone(FTZ)for
manufacturing for expo
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